Karnataka High Court
M/S. Balajhi Designer Jewellary vs M/S. Forever Precious Jewellery on 28 February, 2025
Author: H.P.Sandesh
Bench: H.P.Sandesh
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL REVISION PETITION NO.724/2021
BETWEEN:
M/S. BALAJHI DESIGNER JEWELLARY,
NO.S-112, 1ST FLOOR,
MANIPAL CENTRE,
NO.47, DICKENSON ROAD,
BENGALURU - 01.
REPRESENTED BY ITS PROP:
MR. BALAJI, S/O BABU. ... PETITIONER
(BY SRI. JAYAPRAKASH SHETTY, ADVOCATE)
AND:
M/S. FOREVER PRECIOUS JEWELLERY
AND DIAMOND LTD.,
NO.42, 4TH 'B' CORSS, 5TH BLOCK,
KORAMANGALA INDUSTRIAL ESTATE,
BANGALORE - 560 034.
REPRESENTED BY ITS
REGIONAL MANAGER
MR. PRABHAKAR PARSHI. ... RESPONDENT
(BY SRI. VINEETH REDDY, ADVOCATE)
THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 R/W 401 OF CR.P.C PRAYING TO SET ASIDE THE
JUDGMENT AND ORDER DATED 23.06.2020 PASSED BY THE
LXIX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-70)
BENGALURU IN CRL.A.NO.417/2016 THEREBY CONFIRMING THE
JUDGMENT AND ORDER DATED 02.03.2016 PASSED BY THE XXI
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU
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IN C.C.NO.8529/2009 BY ALLOWING THE ABOVE REVISION
PETITION.
THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD
AND RESERVED FOR ORDERS ON 06.02.2025, THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE H.P.SANDESH
CAV ORDER
This appeal is filed against the conviction of the petitioner
for the offence punishable under Section 138 of the Negotiable
Instruments Act ('NI Act' for short) and also imposing of the fine
and default sentence and also order of confirmation passed in
Crl.A.No.417/2016.
2. The factual matrix of the case of the complainant
before the Trial Court is that the complainant is a Company
carrying on jewellery and diamond business represented by its
official, whereas the accused is also carrying on jewellery
business represented by its Proprietor. The accused there and
then approached the complainant and purchased diamond and
gold articles. Accordingly, the complainant sold the gold and
diamond articles to the accused on credit basis. As per the
business transactions, the accused is liable to pay credit
purchase balance of Rs.67 lakhs on articles and in order to
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discharge the debt and legal liability, the accused issued ten
cheques. When the said cheques were presented, cheque Nos.1
to 7 were returned with an endorsement "funds insufficient" and
cheque Nos.8 to 10 were returned with an endorsement "stop
payment on 08.12.2008. Having received the said intimation,
the complainant issued legal notice calling upon the accused to
make the payment and he did not make the payment inspite of
service of notice and gave reply in terms of Ex.P.46 and hence
complaint was filed and cognizance was taken and the accused
did not plead guilty and claimed trial. The complainant in order
to substantiate its case, examined its official as P.W.1 and got
marked the documents at Exs.P.1 to 54. The accused was
subjected to 313 statement and thereafter he led evidence by
examining himself as D.W.1 and marked the documents at
Exs.D.1 to 12. The Trial Court having considered both oral and
documentary evidence placed on record and also having
considered the reply given in terms of Ex.P.46 dated
26.11.2008, extracted the contents of the reply notice in
paragraph No.13 and also taken note of Section 58 of the Indian
Evidence Act that there is an admission. The Trial Court also
taken note of that there is no rebuttal evidence inspite of the
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accused led evidence by examining himself as D.W.1 and no
material is placed for having repaid the amount to the tune of
Rs.67 lakhs and hence convicted him to pay the fine amount and
in default to undergo simple imprisonment for six months and
directed to pay the amount within three months.
3. Being aggrieved by the said order, an appeal is filed
in Criminal Appeal No.417/2016. The Appellate Court considered
the grounds urged in the appeal in respect of the merits as well
as the grounds which have been urged that the very complaint
itself is not maintainable. The Appellate Court taken note of the
documents of Exs.P.49 and 50, where there is an authorization
to the representative of the Company to conduct the proceedings
and also taken note of that in the Articles of Association there is
a delegation of power under Article 163 (27)(28), wherein there
is a power to delegate authority to any person which is vested
with the Directors and extracted Article 164(a)(b) of the Articles
of Association and comes to the conclusion that the complaint is
in order. The Appellate Court also re-analyzed the material on
record and appreciated both oral and documentary evidence
placed on record and comes to the conclusion that the accused
fails to rebut the fact that he has not issued any cheques for
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discharge of liability for purchase of jewels from the complainant
and held that the complainant has proved its case and dismissed
the appeal in coming to the conclusion that the Trial Court has
not committed any error.
4. Being aggrieved by the concurrent finding, the
present revision petition is filed before this Court.
5. The main contention of the learned counsel for the
petitioner before this Court is that both the Courts have
committed an error in coming to the conclusion that the
complaint is maintainable and actually the complaint itself is not
maintainable and the witness who has been examined is without
any resolution. The learned counsel contend that both the
Courts have committed an error in not appreciating and applying
the mind that the respondent Company did not prefer the
complaint in question. The complaint filed by the complainant is
not in accordance with the provisions of the Companies Act. The
complaint filed by the Regional Head of the Company was not
authorized to file the same, which was not at all considered by
both the Courts while passing the impugned order and passed
the conviction solely on the basis of Exs.P.1 to 10 and 46, which
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are totally irrelevant. It is contended that the petitioner has
categorically made the statement that Ex.P.46, which is the
reply notice, is not issued by him, but it was created by the
officials of the complainant Company and the same was not
properly appreciated. It is contended that the learned
Magistrate and the Appellate Court failed to appreciate the fact
that the respondent in his cross-examination stated that the
complaint filed by the Regional Manager, namely Prabhakar
Parshi who was not authorized to present the said complaint and
he had filed the complaint without taking the permission of the
complainant Company and he has filed the complaint in his
personal capacity. It is contended that the alleged reply notice
Ex.P.46 does not bear the signature of the petitioner and the
alleged reply notice was disputed by the petitioner. This aspect
is not considered by both the Courts. Both the Courts have
totally misread and misunderstood the material on record and
hence it requires interference of this Court by exercising the
revisional jurisdiction.
6. The learned counsel for the petitioner in support of
his arguments relied upon the judgment of the Apex Court in the
case of A.C. NARAYANAN v. STATE OF MAHARASHTRA AND
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ANOTHER reported in AIR 2015 SC 1198, wherein it is held
that there is no whisper in verification statement about filing of
complaint as power of attorney holder and issuance of
cognizance is held not proper. The complaint allegedly filed by
employee of Company claiming to be general power of attorney
of the complainant Company and the complaint was not signed
either by the Managing Director or Director of the company and
subsequently the Deputy General Manager of the Company gave
evidence on behalf of the Company though he does not know
anything. There is nothing on record to suggest that he was
authorized by the Managing Director or any Director and
acquittal of the accused was held proper. The learned counsel
also brought to the notice of this Court paragraph Nos.18 and 20
of the said judgment.
7. The learned counsel also relied upon the judgment of
this Court in the case of M/S. CANARA WORKSHOPS
LIMITED v. SHRI MANTESH reported in (2014) 1 Kar.L.J.
449, wherein this Court relied upon paragraph Nos.24 and 25 of
the Madras High Court judgment in the case of Shakthi
Concrete Industries Limited and others v. Valuable Steels
(India) Limited reported in (2000) 100 Company Cases
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429, wherein discussion was made with regard to Sections 142
and 142(a) of the NI Act. The learned counsel also brought to
the notice of this Court paragraph No.4, wherein discussion was
made regarding holding the view that the Company being a
juristic person, any person on behalf of the Company would have
to be authorized by the Company in the Articles of Association or
by a separate resolution to depose on behalf of the Company
and also discussion was made with regard to Section 291 of the
Companies Act.
8. The learned counsel also relied upon the judgment of
this Court in the case of DIRECTOR, MARUTI FEEDS AND
FARMS PRIVATE LIMITED v. BASANNA PATTEKAR reported
in 2007 SCC ONLINE KAR 210 and brought to the notice of
this Court paragraph Nos.3 and 4 of the said judgment, wherein
an observation is made that the resolution of the Company is not
produced and he has pleaded his ignorance in the cross-
examination about the resolution passed by the Board of
Directors. In paragraph No.4 discussion was made that since
the Company is a juristic person, any person on behalf of the
Company has to be authorized by the Company under the
Articles of Association or by a separate resolution to depose on
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behalf of the Company and therefore, finding of the Trial Court is
justified and it is unnecessary to go into the other reasons
recorded by the Trial Court in dismissing the complaint and
acquitting the accused.
9. The learned counsel also relied upon the judgment of
this Court in the case of GEORGE JOSEPH AND ANOTHER v.
HMT (INTERNATIONAL) LIMITED, BANGALORE AND
ANOTHER reported in 2015 (1) AKR 822, wherein it is held
that complaint on behalf of the Company if could be presented
and prosecuted by a power of attorney holder, appointed by the
Chairman of the Board of Director, a letter of authorization or a
power of attorney executed by Chairman or other officer of the
Company without delegation of the power to institute such
proceedings having emanated from Board of Director, the same
would invalidate proceedings.
10. The learned counsel referring these judgments would
contend that P.W.1, who has been examined before the Trial
Court is without any resolution and the complaint itself is not
maintainable and but both the Courts failed to consider the said
fact into consideration.
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11. This Court in the previous date of hearing made it
clear that if the learned counsel for the respondent does not
appear on the next date of hearing, the matter will be heard in
his absence. The learned counsel for the respondent fails to
appear and address his arguments and hence this Court
reserved the matter for orders.
12. Having heard the learned counsel for the petitioner
and considering the material on record and the principles laid
down in the judgments referred supra, the points that arise for
the consideration of this Court are:
(i) Whether both the Courts have committed an
error in convicting the revision petitioner
without examining the issue of maintainability
of the complaint, as contended and requires
interference of this Court by exercising the
revisional jurisdiction?
(ii) What order?
Point No.(i):
13. Having heard the learned counsel for the petitioner
and also considering the grounds urged in the revision petition,
which is already narrated above, the very case of the
complainant is that the complainant is engaged in the business
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of supplying gold and diamond articles and the accused had
approached the complainant there and then and availed the
credit benefit by purchasing diamond and gold articles. It is the
case of the complainant that as per the business transaction, the
accused was liable to pay Rs.67 lakhs as credit purchase
balance. The learned counsel contend that ten cheques were
issued by the accused and when the same were presented, they
were dishonoured with an endorsement "insufficient funds" for
cheque Nos.1 to 7 and "stop payment" for cheque Nos.8 to 10.
Hence, legal notice was issued to the accused and the same has
been served and reply was given in terms of Ex.P.46. The Trial
Court and the Appellate Court having taken note of both oral and
documentary evidence placed on record, convicted the petitioner
and confirmed the same.
14. The main contention of the learned counsel for the
petitioner is that the very complaint itself is not maintainable. In
order to consider the said contention, the Court has to take note
of the very complaint and the complaint is filed on behalf of the
Company represented by its Regional Manager, Mr. Prabhakar
Parshi. While filing the complaint, authorization was given in
terms of Ex.P.49. Having perused Ex.P.49, it is the true copy of
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the resolution passed by the Board of Directors of Forever
Precious Jewellery and Diamonds Limited at its meeting held on
24.10.2008 at Mumbai, wherein it is resolved that Mr. Prabhakar
Parshi, Regional Manager of the Company is authorized to
initiate legal proceedings for and on behalf of the Company. It is
important to note that the same is signed by the Managing
Director on behalf of the Company. Hence, it is clear that
resolution was passed on 24.10.2008 to initiate the proceedings
against the revision petitioner herein. It is important to note
that as per Ex.P.50, P.W.1 is authorized to give evidence and
while giving the authorization, it is made clear that Sri Munendra
Singh Chauhan is authorized to represent the Company in the
complaint, particularly to this case and while giving such
authorization it is made clear that the Company was earlier
represented by Mr.Prabhakar Parshi, Regional Manager of the
Company, who is no longer in the service of the Company and
hence Mr. Chauhan is authorized to tender evidence on behalf of
the Company, present himself for cross-examination and file
necessary documents/pleadings as may be required till the
disposal of the case.
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15. It is important to note that the complainant also
produced the document of 15th Annual Report 2010-2011, which
is marked as Ex.P.51 and so also produced the document of
Memorandum and Articles of Association of Forever Precious
Jewellery and Diamonds Limited, which is marked as Ex.P.52.
Article 163(12), (27) and (28) of the Articles of Association reads
as under:
"163. Without prejudice to the general powers
conferred by Article 160 and the other powers
conferred by these present but subject however to
the provisions of the Act, it is hereby expressly
declared that the Directors shall have the following
powers:
(12) to institute, conduct, defend,
compound or abandon any legal proceedings
by or against the Company or its officers or
otherwise concerning the affairs of the
Company and also to compound and allow time
for payment or satisfaction of any debt due or
of any claims or demands by or against the
Company.
(27) generally subject to the provisions of
the Act and these Articles to delegates the
powers, authorities and discretions vested in
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the Directors to any person, firm, company or
fluctuating body of persons as aforesaid.
(28) to delegate, sub-delegate or attorney
all or any of the powers, authorities and
discretions for the time being vested."
16. Article 164(a) and (b) of the Articles of Association
reads as follows:
"164(a) Subject to the provisions of the Act, the
Directors may from time to time appoint or re-
appoint one or more of their body to be the
Managing Director or Directors or the whole time
Director or Directors of the Company for such term
not exceeding five years and subject to such
remuneration, terms and conditions as they may
think fit.
(b) Subject to the provisions of the Act, the
Directors may from time to time entrust to and
confer upon the Managing Director or the whole
time Director, for the time being such of the powers
exercisable under these presents by the Directors as
they may think fit, and may confer such powers for
such time and to be exercised for such objects and
purposes and upon such terms and conditions, and
with such restrictions as they think expedient, and
they may confer such powers, either collaterally
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with or to the exclusion of and in substitution for all
or any of the powers of the Directors, in that behalf
and may from time to time revoke, withdraw, alter
or vary all or any of such powers."
17. Having considered the grounds urged by the learned
counsel for the petitioner, it is clear that the complaint was filed
by an authorized person and resolution was passed on
24.10.2008 and the said resolution was issued by the Managing
Director of the Company consequent upon the resolution passed
by the Board of Directors. Hence, it is clear that authorization
was given to the Regional Manager of the Company to initiate
the proceedings against the petitioner. The document of Ex.P.50
is also very clear that the said Regional Manager had left the
Company and hence the Managing Director of the Company in
exercise of the power under Articles 163 and 164 of the Articles
of Association, authorized Mr. Munendra Singh Chauhan to
examine himself and lead evidence. P.W.1 who has been
examined before the Trial Court is the authorized person, who
gave evidence and hence the petitioner cannot find fault with the
evidence led by P.W.1. No doubt, the learned counsel for the
petitioner relied upon the judgment of the Apex Court in the
case of A.C. Narayanan (supra), wherein the Apex Court held
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that the complaint was not signed either by the Managing
Director or Director of Company and subsequently Deputy
General Manager of the Company gave evidence on behalf of the
Company though he does not know anything. Nothing on record
to suggest that he was authorized by Managing Director or any
Director. Hence, the acquittal of the accused was held proper.
18. But in the case on hand, the factual aspect is
different and before initiating the proceedings, general body
meeting was held and resolution was passed in terms of Ex.P.49
and when the person who was authorized left the Company,
authorization was given to P.W.1 by the Managing Director in
terms of Ex.P.50 and also powers are conferred to the Director
and Managing Director in terms of Articles 163 and 164 of
Ex.P.52 i.e., Memorandum and Articles of Association of the
complainant Company and hence the said judgment is not
applicable to the facts of the case on hand.
19. The learned counsel also relied upon the judgment of
this Court in the case of M/s. Canara Workshops Limited
(supra), wherein in paragraph Nos.24 and 25 of the Madras High
Court judgment in the case of Shakthi Concrete Industries
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Limited and others v. Valuable Steels (India) Limited
reported in (2000) 100 Company Cases 429, an observation
is made that there is no dispute in the concept that the Company
being by itself a legal person as a payee or a holder in due
course, alone could file the complaint under Section 142 of the
NI Act. It is also not in dispute that a Director or a Manager in
his individual capacity cannot be said to be a payee or a holder
in due course in terms of Section 142(a) of the Act. It is also
taken note of that the complainant Company has approached the
Court through some human agency, namely, a Director of the
Company, in preferring the complaints, as the Company has no
soul, mind, body and, limbs. If the Company approaches the
Court through some other person, who is not connected with the
affairs of the Company, then necessarily it has to authorize that
person to file the complaint on its behalf.
20. In the case on hand, the factual aspects are
different. The Regional Manager of the Company was authorized
to file a complaint and resolution was passed in the general body
meeting and thereafter on account of he left the Company,
further authorization was given to Sri Munendra Singh Chauhan
by the Managing Director who was authorized to do the same.
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Hence, this judgment is also not applicable to the facts of the
case on hand.
21. The learned counsel for the petitioner also relied
upon the judgment of this Court in the case of Basanna
Pattekar (supra), wherein discussion was made that since the
Company is a juristic person, any person on behalf of the
Company has to be authorized by the Company under the
Articles of Association or by a separate resolution to depose on
behalf of the Company and therefore, finding of the Trial Court is
justified and it is unnecessary to go into the other reasons
recorded by the Trial Court in dismissing the complaint and
acquitting the accused. In the case on hand, I have already
pointed out that there was a resolution by the Company and the
Managing Director was authorized to exercise his powers under
Articles 163 and 164 and hence the very contention of the
learned counsel for the petitioner that the complaint is not
maintainable cannot be accepted.
22. The learned counsel for the petitioner also relied
upon the judgment of this Court in the case of George Joseph
(supra), wherein it is held that a letter of authorization or a
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power of attorney executed by Chairman or other officer of the
Company without delegation of the power to institute such
proceedings having emanated from Board of Directors would
invalidate the proceedings. This judgment is also not applicable
to the facts of the case on hand, since the document of Ex.P.49
is very clear that the Company itself has authorized the Regional
Manager to initiate the proceedings against the petitioner by
passing a resolution in the general body meeting and
subsequently on change of the Regional Manager, further
authorization was given to P.W.1 in terms of Ex.P.50 and the
same is also in terms of the power conferred on the Director and
the Managing Director as envisaged under Articles 163 and 164
of Articles of Associations, which I have referred above and
hence the first and foremost contention of the learned counsel
for the petitioner that the complaint itself is not maintainable
cannot be accepted.
23. The learned counsel for the petitioner mainly argued
with regard to the maintainability and not touched upon the
merits of the petition. This Court having considered the merits
also, it is not in dispute that cheques Exs.P.1 to 10 have been
issued. In one breath the petitioner says that those cheques are
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issued as security and in other breath says that the cheques
were obtained by coercion in the police station. The issuance of
cheques is not disputed and the same is signed by the petitioner
is also not in dispute. The petitioner cannot blow hot and cold.
The fact that there were business transactions between the
complainant and the accused is not in dispute. It is important to
note that the Trial Court relied upon Ex.P.46 reply notice issued
by the accused. In the reply notice, the accused categorically
admitted the relationship between the parties and also the
business and admits that he has done business with the
complainant to the extent of 3½ Crores so far and the
complainant used to give jewellery to the accused to be kept in
safe custody and for sale worth Rs.2 Crores always and in turn
the accused used to sell them or part thereof and settle the
transaction by remitting dues and return the balance jewellery
on the complainant's demand. In paragraph No.4 of the reply
notice, the accused admits that the complainant has sold
diamond jewellery item to the accused worth Rs.67 lakhs and
that the diamond jewellery articles worth Rs.60 lakhs have been
resold by him to third parties and the payments pertaining to
those transactions have not yet been received by him and
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balance of articles worth Rs.7 lakhs are also pending on account
between him and third parties. It is also stated that the
complainant must be aware of the fact that for this type of
transaction by the accused with third parties there is due
consent and permission by the complainant and acknowledges
the receipt of diamond jewellery articles supplied by the
complainant and therefore requests the patience of the
complainant by waiting for some time till all the payments are
received by the accused from third parties and repay them to
the complainant. Hence, this averment made in paragraph No.4
of the reply notice is clear that reply was given and notice was
served and admitted the transaction.
24. It is important to note that the very reply notice
issued by the petitioner was disputed by the petitioner that no
such reply was given. If no such reply was given through his
advocate, the petitioner ought to have examined the advocate
who issued the notice on his behalf and who gave the
instructions to issue such notice. But only contention was taken
that the same is created and mere taking of defence is not
enough and the same has to be proved and no cogent evidence
is placed before the Court to accept the contention of the
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petitioner. Both the Courts have taken note of Ex.P.46, wherein
specific admission was given and the Trial Court also observed
that Section 58 of the Indian Evidence Act is very clear that
admitted facts need not be proved.
25. The Appellate Court also in detail discussed both oral
and documentary evidence placed on record and also discussed
with regard to the grounds which have been urged that the
complaint itself is not maintainable. The Appellate Court in
paragraph No.17 discussed both oral and documentary evidence
placed on record with regard to the merits of the case and also
the defence. In paragraph No.18 discussed with regard to
authorization is concerned and relied upon Exs.P.49 to 52 and
even taken note of Article 163 (27) and (28) as well as Article
164(a) and (b) of the Articles of Association and extracted the
same. The Appellate Court considering both oral and
documentary evidence placed on record, in detail discussed the
same and relevant materials were also taken note of and in
paragraph Nos.20 and 21 taken note of the business to the
extent of Rs.67 lakhs and the liability admitted by the petitioner
and comes to the conclusion that the complainant has
discharged his initial burden. It has also taken note of
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presumption under Section 139 of the NI Act since cheques are
admitted and also taken note of the issuance of the cheques by
the petitioner for discharge of liability for the purchase of jewels
from the complainant and in the reply also it is stated that the
complainant has to wait for some time for clearance of payment
by third parties to whom he has sold the articles.
26. Having considered all these materials on record, both
the Trial Court and the Appellate Court comes to the conclusion
that the complainant has proved the case. No doubt, the
revision petitioner examined himself as D.W.1 and got marked
the documents at Exs.D.1 to 12, but no material is placed on
record to show that the accused has repaid the amount of Rs.67
lakhs. He gave admission in the cross-examination regarding
transaction is concerned, particularly admitted the memorandum
of agreement in terms of Ex.P.47 with regard to the business
and also categorically admits that earlier he was having good
and cordial relationship with the Company and also admits that
he did not take any action in respect of issuance of reply notice
in terms of Ex.P.46 as against the advocate.
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27. Having taken note of all these admissions and
evidence on record, it is not a case for exercising of revisional
jurisdiction and no perversity is found in the findings of the Trial
Court and the Appellate Court. Both the Courts have given
detailed consideration and meticulously examined the documents
of Exs.P.1 to 10, 46, 47, 49, 50, 51 and 52 and hence the order
of both the Courts not suffers from its legality and correctness
and the same is based on material on record and question of law
not involved in the matter and hence it is not a case for
interference by exercising the revisional jurisdiction.
Point No.(ii):
28. In view of the discussions made above, I pass the
following:
ORDER
The criminal revisional revision is dismissed.
Sd/-
(H.P. SANDESH)
JUDGE
MD
